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The Healthcare Reform legislation includes vendor-provider reporting requirements, also known as the “sunshine law.” The law requires manufacturers of drugs, medical devices, medical supplies, and biologics to report financial arrangements with certain “covered recipients.” “Covered recipients” include physicians or teaching hospitals. The manufacturer must make the report to the U.S. Department of Health and Human Services (HHS). Then HHS must disclose the information on a public website.

The purpose of the reporting and disclosure requirements is to promote transparency of these financial arrangements. The goal is to encourage the avoidance of conflicts of interest that can compromise clinical care, biomedical research, and medical education, and potentially lead to violations of federal anti-fraud statutes.

The federal sunshine law generally preempts state sunshine laws with the exception of state laws that require disclosure of information not required under the federal legislation or excluded by the federal legislation, by any person or entity other than an applicable manufacturer or a covered recipient, or reporting of information to a Federal, State, or local government agency for public health surveillance, investigation, or other public health purpose. Manufacturers practicing in states with sunshine laws must now be attentive to both the federal and state law requirements to ensure compliance to both requirements.

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The College of American Pathologists (CAP) recently announced that it is changing its accreditation checklist for CLIA accreditation in response to an interpretation communicated by the Centers for Medicare and Medicaid Services (CMS) with regard to the qualifications for “processing” personnel. Previously CAP treated “processing” personnel different from “grossing” personnel and did not require “processing” personnel to meet the requirements for “high complexity testing.” Laboratory providers who previously relied upon the distinction of “processing” vs. “grossing” must now ensure that all personnel who perform macroscopic tissue examinations meet the educational requirements of 42 CFR §493.1489 or are grandfathered pursuant to 42 CFR §493.1489 or 42 CFR §493.1491. If personnel meet the requirements to be “grandfathered”, additional supervision requirements may apply.

For more information, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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A proposed bill, the Medicare Fraud Enforcement and Prevention Act, introduced in the House on Tuesday would double penalties for Medicare fraud. Sentences for Medicare fraud would be increased from 5 to 10 years and fines from $25,000 to $50,000. In addition, it would create a new crime for distributing patients’ Medicare or Medicaid IDs or billing information. That new crime would carry a maximum 3-year sentence.

The bill was introduced by two representatives from Florida, Ileana Ros-Lehtinen (R-Miami) and Ron Klein (D-Boca Raton). The bill, one of the first bipartisan efforts since the passage of the federal healthcare reform is a rebuttal to the increase in fraud despite the efforts of a federal health care fraud task force that prosecuted more than 800 people and identified more than $2.5 billion in fraudulent claims since 2006. According to law enforcement officials, Medicare fraud is an estimated $60 billion annual crime and is now more lucrative than drug dealing.

For more information on health law issues, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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Providers and suppliers that receive request letters from Recovery Audit Contractors (RACs) should ensure the following:

  • The claims selected involve issues approved for review on their RAC region’s approved issues list.
  • The request letters meet the timeframes and medical record limits set by CMS.
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    The healthcare reform legislation included changes for home health and DME providers. First of all, DME or home health services may only be ordered for Medicare beneficiaries by Medicare enrolled physicians or eligible professionals. In addition, Medicare enrolled physicians are required to have a face-to-face encounter with a patient prior to issuing a certification for home health services or written order for DME. Finally, Medicare physicians, suppliers, and providers are required to maintain and provide access to documentation related to written orders or requests for payment for DME, certifications for home health services or referrals for other items and services. Failure to maintain these documents or to provide access to them could result in the revocation of enrollment for not more than one year for each act.

    For more information on health law issues, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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    The Health Reform bill, or the Patient Protection and Affordable Care Act, amended the definition of remuneration in the Civil Monetary Penalties Law. The amendment clarifies that certain charitable activities are not prohibited under the law. The amended law excludes the following from qualifying as remuneration:

  • Any remuneration which promotes access to care and poses a low risk of harm to patients and Federal health care programs.
  • The offer or transfer of items or services for free or less than fair market value by a person if the items or services consist of coupons, rebates, or other rewards from a retailer; the items or services are offered to the general public on equal terms regardless of health insurance status; and the offer or transfer of items or services is not linked to another provision of services or items reimbursed in whole or in part by Medicare or Medicaid.
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    Andrew Wachler, principal of Wachler & Associates, P.C., presented “The New Audit Landscape: MICs, MACs, and RACs” in an American Bar Association (ABA) teleconference with James Sheehan, New York Medicaid Inspector General.

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    Region A: The RAC for Region A, DCS Healthcare, posted three new issues for non-medical necessity DRG validation inpatient claims review for providers in District of Columbia, Connecticut, Massachusetts, Maine, Delaware, New Jersey, New York, New Hampshire, Pennsylvania, Rhode Island, and Vermont.

    Region B: Region B’s RAC, CGI, added 20 new issues for non-medical necessity DRG-validation inpatient claims to its CMS-approved list for providers in all Region B states.

    Region C: Connolly Healthcare posted 30 new issues for non-medical necessity DRG validation inpatient claims review for providers in the following Region C states: Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.

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    In a decision issued February 10, 2010, the Medicare Appeals Council reached a decision on an appeal from the RAC Demonstration Project. The Recovery Audit Contractor (RAC) initially found that the provider had received an overpayment for the inpatient services covered under Medicare Part A, but the beneficiary met the criteria for outpatient observation. Nevertheless, the RAC denied the entire claim. The provider ultimately appealed to an Administrative Law Judge (ALJ). The ALJ’s decision was “partially favorable.” The ALJ denied Medicare Part A coverage for the inpatient services, but found that the “observation and underlying care” services under Medicare Part B were warranted. The Medicare Appeals Council followed the ALJ’s decision, stating that the Centers for Medicare and Medicaid Services’ (CMS) Medicare Benefits Policy Manual clearly indicates that the payment may be made for covered hospital services under Part B, if a Part A claim is denied for one of several reasons. The Council required the RAC to work with the provider to arrange for billing under Part B, and offset any Part A overpayment.

    If you need assistance with a RAC or third party payor audit or for more information, please visit https://www.wachler.com/ or contact a Wachler & Associates attorney at 248-544-0888.

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